Tuesday, 3 May 2011

The Flaw: learning economic citizenship and how the world works

The Flaw is a remarkable documentary film about the origins of the financial crisis. It is named after Alan Greenspan’s pained remark to the US Congress that “I have found a flaw in the model that defines how the world works and I was shocked.” As Chairman of the US Federal Reserve bank for 19 years, Greenspan was the most powerful man in the world. His neoliberal free-market model set the rules for the rest of us. The film shows participants at all levels of the financial crisis, from its sub-prime victims to mortgage brokers and bankers. The Flaw presents compelling detailed evidence for how that model redistributes money from poor to rich and created the financial crisis. The film does not cover every aspect of the crisis, such as the role of ratings agencies like Standard & Poor. It may be a bit too long and sometimes repetitive. But it is well worth seeing if you get a chance. The Flaw is set to screen at The Curzon Soho in London on the 7th June - time TBC, and the makers are keen for it others to show it.
This film could be a powerful stimulus for discussion and further reading about the current economic model and alternatives to it. Without informed citizens the causes of the fiancial crisis are likely to continue and create yet aother crash in future. My previous blog suggested further reading on the financial crisis. For a wider analysis, read Ha-Joon Chang’s book 23 Things They Didn’t Tell You about Capitalism for another eye-opening and entertaining look at how the economy really works. Chang shows why the so-called free market is bad for people and bad for the economy, and what to do about it. John Kay’s 2004 book, The Truth About Markets, is another accessible expose of the flaws in the American business model.

The challenge is to make information and ideas about how the economy really works accessible to citizens and inform our participation in politics.